A new and totally unnecessary controversy has erupted regarding the “guilt” of Chidambaram in the 2G “scam”. I put scam in paranthesis because I have always maintained that there is no real scam – at least not the way the CAG and the media have hyped it. Apparently, a letter written by Ministry of Finance and “seen” by Pranab Mukherjee in March this year suggests that if the Ministry of Finance had “held” its views, then Raja could not have proceeded with giving away start-up spectrum for free. Of course this is true! Of course important decisions are taken by the cabinet jointly. Of course there are differences of opinion in the cabinet which are subsequently resolved by the ministers concerned. Exactly how and why is Chidambaram guilty of the corruption charges?
Let’s start at the start. The problems for the government began when it was caught with its pants down when the CAG report came out. That report – the most sensationalized and politically motivated report ever by CAG – suggested that by giving away spectrum “free”, the government had caused a loss of Rs 1.76 lac crores to the nation. Usually, a CAG report is tabled in Parliament and the government of the day gets enough time to make its defence. This time however, the CAG leaked the report to the media and the media spun it as a huge scam. At that time, no one in the government knew how to handle the matter. They should have immediately clarified that giving spectrum free was a thought-out government policy and not a scam. Instead, they sought to distance themselves from the policy. They tried to give the impression that it was Raja alone who was responsible for the policy. The media hype was so much that eventually when Kapil Sibal did make an attempt to suggest that this was only a “notional” loss, he had no chance. The truth was buried under a heap of media and opposition rubbish. Now the truth is gradually coming out.
One of the truths that has emerged is that the TRAI was against auction of 2G spectrum. Media doesn’t like to give this fact too much publicity, because this report alone could douse the entire 2G fire out. It’s not as if the TRAI report is binding on the government, but imagine if the government had gone against the TRAI report. That would have been seen as a scam too! In this case, the government was in line with the regulator who had maintained since the beginning that auctions should only be conducted for non-2G spectrum. It was the TRAI that recommended that 3G spectrum be auctioned. It was the same government that went with TRAI recommendation in 3G also. It was the same government that earned Rs 1 lac crores in 3G and BWA auctions. And it was the same government that decided rightly to keep 2G spectrum totally free.
The second truth that has come out – which points to the culpability and political ambitions of the CAG – is that the Chief Auditor who actually led the investigation on behalf of the CAG himself was sure that no loss could be calculated. The grounds for calculating the loss were flimsy. Yet, he was over-ruled by the CAG Vinod Rai himself. Why? Why was Vinod Rai interested in making it a sensational number? Of course, the CAG being an independent “constitutional” body, it is virtually outside the scope of grilling itself.
The MoF letter is supposed to be proof of Chidambaram’s guilt. What guilt? Guilty of being completely involved in the decision to price 2G free? Yes, he is guilty! Guilty of (maybe) having initially disagreed with the policy and later changing his mind? Yes, he’s guilty! But so are all cabinet members guilty. Why is he being singled out? In the cabinet, one assumes (hopefully) that there is a fair degree of debate. There are differences of opinions and subsequently agreements are reached. One cannot take the differences of opinions out of context and say that if those different opinions had been agreed to, the scam may not have happened. In a team working, differences of opinions are always expressed, and then a final call is taken. I think the same has happened here.
But let’s come to the main point. Was there a scam at all? Was Raja guilty? The answer to both is yes, but not the way it is commonly understood.
I have written earlier and I am going to write it again today. 2G spectrum is “plain vanilla” spectrum meant to provide “basic telephony” services to one and all. We don’t remember it today, but before 2001, one had to wait for years before getting a telephone connection. There was rampant corruption in MTNL and BSNL for granting an “out of turn” telephone connection. I remember how MTNL “linesmen” would tamper with the telephone line of one subscriber to give access to illegal STD call for free to another subscriber willing to pay a bribe. Every diwali, the MTNL employees would come home demanding “baksheesh”. Like everything else, economic liberalization freed up telecom as well. The whole telecom policy of free spectrum should be seen keeping this context in mind. The objective of the 2G policy was spreading telephony all over the country. Not making money….This much is contained in the NTP 1999 as well. It is as a result of this objective that the telecom policy has been modified numerous times – every time removing hurdles that were impeding the growth of the sector. The first concession was given when the “fixed” license fee was changed to “revenue share”. That was a good decision too and it helped grow the sector.
From those days to today, just see how the telecom scenario has changed. Today, it’s the telecom companies that chase customers and give free this and free that; not the other way around. Today, the pricing on telephony is cheaper compared to what it was before the 2G revolution; there is deflation, not inflation! Today, even the poorest of persons in this country – yes even those who earn less than the much maligned Rs 30 a day – can afford a telephone connection; earlier owning a telephone connection was almost a status symbol. Today, small disempowered, underprivileged sections of the society are able to conduct their business even without having a permanent business address; earlier, having a “shop” where one could visit was mandatory. 2G has revolutionized communications; empowered the poorest; and madeIndia
The government policy to give 2G spectrum free was just that – a government policy. A well considered; supported by TRAI; debated in cabinet policy. It was not a scam. Just like it is government policy to give kerosene, LPG and diesel cheap to the poor. There is no scam in this. Just like it is government policy to subsidize the cost of fertilizers for the farmers. There is no scam here too. Just like it is government policy to give foodgrains cheap through the PDS system to the poor. There is no scam here. That does not mean that everything is hunky dory. There is rampant corruption throughout the PDS supply chain. There is rampant corruption in the way LPG cylinders are given away to commercial establishments at subsidized rates. Yes, there is a scam if corruption is the scam. But we must understand the distinction between the scam in policy (none) and the corruption in the execution of the policy (rampant).
It’s the same with Raja’s role in 2G. There was no scam in pricing of the 2G spectrum free. The scam was in the way Raja manipulated the rules of the game to suit individual companies. In the way he advanced the date for submission of the entry fees. The way he changed the eligibility criteria to suit certain companies (DB Realty, Unitech). The way he turned a blind eye to certain obvious maneuverings of existing large operators to gain a larger control of the market (Swan-Reliance). These are the scams that have put Raja behind bars. Not pricing the spectrum free. That’s a criminal case of corruption which the SC is trying.…..
The real truth is that we’re a society that has started seeing everything as a scam. Our most successful government policy ever has been branded as the biggest scam. And then, instead of a reasoned debate, we have accusations hurled at each other in public. Of course, there is a reason for this. It’s not as if our politicians have covered themselves in glory with good behavior. All their shenanigans of the past are coming out to bite them now. It is natural for people to see a scam everywhere. The 2G scam is not a scam the way it is being portrayed; but it is surely an indication of the amount of distrust that we have with politicians…….
(PS: This piece requires a post script! I must declare that I carry no brief for the UPA or for Chidambaram. I don’t even know a single politician – leave alone a Congress politician. I have not received any money from the Congress to write this piece (!). And no….I have not been paid by anyone to write this!)
Let’s start at the start. The problems for the government began when it was caught with its pants down when the CAG report came out. That report – the most sensationalized and politically motivated report ever by CAG – suggested that by giving away spectrum “free”, the government had caused a loss of Rs 1.76 lac crores to the nation. Usually, a CAG report is tabled in Parliament and the government of the day gets enough time to make its defence. This time however, the CAG leaked the report to the media and the media spun it as a huge scam. At that time, no one in the government knew how to handle the matter. They should have immediately clarified that giving spectrum free was a thought-out government policy and not a scam. Instead, they sought to distance themselves from the policy. They tried to give the impression that it was Raja alone who was responsible for the policy. The media hype was so much that eventually when Kapil Sibal did make an attempt to suggest that this was only a “notional” loss, he had no chance. The truth was buried under a heap of media and opposition rubbish. Now the truth is gradually coming out.
One of the truths that has emerged is that the TRAI was against auction of 2G spectrum. Media doesn’t like to give this fact too much publicity, because this report alone could douse the entire 2G fire out. It’s not as if the TRAI report is binding on the government, but imagine if the government had gone against the TRAI report. That would have been seen as a scam too! In this case, the government was in line with the regulator who had maintained since the beginning that auctions should only be conducted for non-2G spectrum. It was the TRAI that recommended that 3G spectrum be auctioned. It was the same government that went with TRAI recommendation in 3G also. It was the same government that earned Rs 1 lac crores in 3G and BWA auctions. And it was the same government that decided rightly to keep 2G spectrum totally free.
The second truth that has come out – which points to the culpability and political ambitions of the CAG – is that the Chief Auditor who actually led the investigation on behalf of the CAG himself was sure that no loss could be calculated. The grounds for calculating the loss were flimsy. Yet, he was over-ruled by the CAG Vinod Rai himself. Why? Why was Vinod Rai interested in making it a sensational number? Of course, the CAG being an independent “constitutional” body, it is virtually outside the scope of grilling itself.
The MoF letter is supposed to be proof of Chidambaram’s guilt. What guilt? Guilty of being completely involved in the decision to price 2G free? Yes, he is guilty! Guilty of (maybe) having initially disagreed with the policy and later changing his mind? Yes, he’s guilty! But so are all cabinet members guilty. Why is he being singled out? In the cabinet, one assumes (hopefully) that there is a fair degree of debate. There are differences of opinions and subsequently agreements are reached. One cannot take the differences of opinions out of context and say that if those different opinions had been agreed to, the scam may not have happened. In a team working, differences of opinions are always expressed, and then a final call is taken. I think the same has happened here.
But let’s come to the main point. Was there a scam at all? Was Raja guilty? The answer to both is yes, but not the way it is commonly understood.
I have written earlier and I am going to write it again today. 2G spectrum is “plain vanilla” spectrum meant to provide “basic telephony” services to one and all. We don’t remember it today, but before 2001, one had to wait for years before getting a telephone connection. There was rampant corruption in MTNL and BSNL for granting an “out of turn” telephone connection. I remember how MTNL “linesmen” would tamper with the telephone line of one subscriber to give access to illegal STD call for free to another subscriber willing to pay a bribe. Every diwali, the MTNL employees would come home demanding “baksheesh”. Like everything else, economic liberalization freed up telecom as well. The whole telecom policy of free spectrum should be seen keeping this context in mind. The objective of the 2G policy was spreading telephony all over the country. Not making money….This much is contained in the NTP 1999 as well. It is as a result of this objective that the telecom policy has been modified numerous times – every time removing hurdles that were impeding the growth of the sector. The first concession was given when the “fixed” license fee was changed to “revenue share”. That was a good decision too and it helped grow the sector.
From those days to today, just see how the telecom scenario has changed. Today, it’s the telecom companies that chase customers and give free this and free that; not the other way around. Today, the pricing on telephony is cheaper compared to what it was before the 2G revolution; there is deflation, not inflation! Today, even the poorest of persons in this country – yes even those who earn less than the much maligned Rs 30 a day – can afford a telephone connection; earlier owning a telephone connection was almost a status symbol. Today, small disempowered, underprivileged sections of the society are able to conduct their business even without having a permanent business address; earlier, having a “shop” where one could visit was mandatory. 2G has revolutionized communications; empowered the poorest; and made
The government policy to give 2G spectrum free was just that – a government policy. A well considered; supported by TRAI; debated in cabinet policy. It was not a scam. Just like it is government policy to give kerosene, LPG and diesel cheap to the poor. There is no scam in this. Just like it is government policy to subsidize the cost of fertilizers for the farmers. There is no scam here too. Just like it is government policy to give foodgrains cheap through the PDS system to the poor. There is no scam here. That does not mean that everything is hunky dory. There is rampant corruption throughout the PDS supply chain. There is rampant corruption in the way LPG cylinders are given away to commercial establishments at subsidized rates. Yes, there is a scam if corruption is the scam. But we must understand the distinction between the scam in policy (none) and the corruption in the execution of the policy (rampant).
It’s the same with Raja’s role in 2G. There was no scam in pricing of the 2G spectrum free. The scam was in the way Raja manipulated the rules of the game to suit individual companies. In the way he advanced the date for submission of the entry fees. The way he changed the eligibility criteria to suit certain companies (DB Realty, Unitech). The way he turned a blind eye to certain obvious maneuverings of existing large operators to gain a larger control of the market (Swan-Reliance). These are the scams that have put Raja behind bars. Not pricing the spectrum free. That’s a criminal case of corruption which the SC is trying.…..
The real truth is that we’re a society that has started seeing everything as a scam. Our most successful government policy ever has been branded as the biggest scam. And then, instead of a reasoned debate, we have accusations hurled at each other in public. Of course, there is a reason for this. It’s not as if our politicians have covered themselves in glory with good behavior. All their shenanigans of the past are coming out to bite them now. It is natural for people to see a scam everywhere. The 2G scam is not a scam the way it is being portrayed; but it is surely an indication of the amount of distrust that we have with politicians…….
(PS: This piece requires a post script! I must declare that I carry no brief for the UPA or for Chidambaram. I don’t even know a single politician – leave alone a Congress politician. I have not received any money from the Congress to write this piece (!). And no….I have not been paid by anyone to write this!)
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